This and previous notes can be found at Sub stack Asian Market Sense
Check out ERI-C.com for your research needs
Asia expect a positive open following the bounce in US markets
Australia Futures indicate market to open +36pts but may see caution ahead of the expected data on Retail Sales and Leading Index. Oil weak -VE Santos and Woodside. Gold weak -VE Newcrest etc. Afterpay Ltd and Appen Ltd may see upside following the US rally. Qantas to cut travel agent commissions could hurt Webjet and others
Japan Nikkei futures opened +53pts and have rallied to +100pts as inflation data remains subdued +VE
S Korea Expect markets to open higher following the US rebound; PPI higher than F/cast will fuel inflation worries and may limit the upside.
Taiwan Market to open higher on strong export data for both tech and traditional exports and boosted by the rebound in US markets overnight
China Market to open higher but upside limited by concerns over international relations as the EU halts ratification of trade deal with China
HK ADR’s indicate +9pts pts 28,459 Tencent ADR closed lower despite earnings beating f/casts; reflecting the concern over more regulation.
Opened flat Dow +18pts S&P +0.03% and NDX +0.07%
AHEAD Existing Home Sales,Baker Hughes Rig Count.
Earnings Deere, Foot Locker, Buckle, VF Corp, Booz Allen Hamilton
DOW +0.55%, NDX +1.77%, S&P +1.06%, Russel 2K +0.6%
Market trended higher from the open on good jobs data and worked better until a slight dip into the close. Tech saw a strong rebound but Bitcoin remained volatile. After market Home Depot +0.7% announced a new $20bn share buyback program.
US. Commerce Secretary Gina Raimondo was holding a pair of meetings Thursday with senior U.S. auto industry leaders and other industry executives on a semiconductor shortage that has cut production.
Cisco +0.7% despite weaker than expected guidance.
Hormel Foods +7.4% quarterly earnings beat said demand in its various channels remains elevated compared to pre-pandemic levels.
BJ’s Wholesale (BJ) -5% beat estimates SSS ex-fuel fell by 5%, but that was smaller than the 8.3% drop predicted. BJ’s also said that the rest of 2021 remains difficult to forecast.
Kohl’s (KSS) -10.2% in premarket action, despite beats on both the top and bottom lines for its latest quarter.
Petco (WOOF) -1% quarterly earnings & revenue beat and it raised its full-year outlook but trading was volatile
L Brands (LB) -4% results beat; SSS at Victoria’s Secret unit jumped 25%, while Bath & Body Works SSS +16%. The company is not providing guidance for the full year, and also said it is targeting the completion of its split into two separate companies for August.
Synopsys (SNPS) +3.1 % it beat top and bottom line estimates. The company said demand is strong and that it foresees a new wave of growth ahead.
Banks JPMorgan Chase -0.2%, Citigroup -0.3% Wells Fargo -1%, Amex +0.5%
Work from home names: Facebook +1.6%, Apple +2.1%, Amazon +0.5%, Netflix +2.9%, Disney +1.2%, Zoom Video +4.6%, Alphabet +1.6% and Microsoft +1.4%,
Tech NXP Semi +2.4%, Nvidia +3.9%, Micron +1.5%, AMD +2.4%, Skyworks +1.4%
Re-opening stocks Boeing +1.4%, Caterpillar -0.8%, Simon Property +0.2%, Kohl’s -10.2%, Nordstrom -6.3%, Gap -4%, United Airlines -1.3%, Carnival -0.5%, Wynn Resorts +0.3%, Chevron +0.4%, Exxon Mobil -0.2%,
Lock down names Campbell Soup +1.1% General Mills +0.5%, JM Smucker +0.4%
Philadelphia Fed Manufacturing Index May 31.5 vs 50.2 Apr (F/cast was 48)
Initial Claims 444k vs 478k prior revised (F/cast was 451k)
4 week Average Claims 504.75k vs 535.25k prior revised (F/cast was 505.25K)
Continuing Claims 3.751m vs 3.640m prior (F/cast was 3.6m)
EIA Natural Gas Report 71 Bcf vs 71 Bcf prior (Consensus was 60Bcf)
CB Leading Index Apr +1.6% MoM vs +1.3% Mar (F/cast was +1.2%)
10 year TIPS Auction -0.805% vs -0.58% prior
USD was vs Yen & Euro. Bitcoin +4.6% @ 40,744.59 remains volatile on talk of more regulation.
VIX -6.8% @ 20.67,
US T10 @ 1.628%
OIL Brent -0.12%, WTI -2.23% weak on expectation of Iranian oil being allowed onto the international market.
Gold +0.6%, Silver +0.5%, Copper -1.02% Platinum +0.9%, Palladium -0.1%.
AHEAD Existing Home Sales,Baker Hughes Rig Count.
Earnings Deere, Foot Locker, Buckle, VF Corp, Booz Allen Hamilton
DAX +1.7%, CAC +1.29%, FTSE +1%
Opened higher but drifting lower and hit flat mid morning and then reversed as US marekts opened higher and trended higher for the rest of the day to close at the day highs., seemingly ignoring the threat of Fed tapering and the volatility of crypto. News of an EU travel standard +VE for tourism stocks.
German PPI slightly higher than F/cast and Eurozone current account better than F/cast.
Trainline -23% but off early lows as the British government prepares to announce a long-awaited overhaul of the rail system on Thursday.
EasyJet -2% posted a fiscal first-half loss of £701 million ($990 million) and vowed to fly 15% of its pre-pandemic schedule in the Q3 as travel restrictions ease between the U.K. and Europe.
Royal Mail +2.6% full-year adjusted operating profit of £702 million, a 116% surge from the previous year. However, it refrained from providing a forecast for the current fiscal year, citing uncertainties.
Deutsche Telekom +2.5% raised its medium-term profit outlook to 3%-5% growth per annum until 2024.
Earnings due from Kingfisher -0.6%, National Grid +2.2%, Manchester United -0.3% and QinetiQ flat
Current Account Mar €31B vs €13.2B Feb revised (F/cast was €25.1B)
Construction Output Mar +18.3% YoY vs -5.4% Feb revised (F/cast was +17%)
PPI Apr +0.8% MoM vs +0.9% Mar (F/cast was +0.6%)
PPI Apr +5.2% YoY vs +3.7% Mar (F/cast was+5%)
Industrial Trends Orders May 17 vs -8 Apr (F/cast was 5)
After market UK Consumer Confidence May -9 vs -15 Apr (F/cast was -14)
EUROZONE Manufacturing, Service and Composite Flash PMI, Consumer Confidence Flash,
GERMANY Manufacturing, Service and Composite Flash PMI, Bundesbank Monthly Report,
FRANCE Manufacturing, Service and Composite Flash PMI
UK Retail Sales, Manufacturing, Service and Composite Flash PMI
Nikkei futures opened +53pts and have rallied to +100pts as inflation data remains subdued +VE
Yen currently 108.75
Inflation Rate Apr -0.4% YoY vs -0.2% Mar (F/cast was +0.1%)
Inflation Rate Apr -0.4% MoM vs +0.2% Mar (F/cast was +0.3%)
Inflation Rate Ex Foods & Energy Apr -0.2% YoY vs +0.3% Mar (F/cast was +0.3%)
Core Inflation Rate Apr -0.1% YoY vs -0.1% Mar (F/cast was -0.1%)
Due after the open May PMI’s
Manufacturing (April was 53.6 F/cast is 53.3)
Services (April was 49.5 F/cast is 48)
Composite (April was 51.0 F/cast is 51)
Tokyo reported 843 new cases and Osaka 501
Japanese regulators recommended the approval of COVID-19 vaccines developed by Moderna Inc and AstraZeneca PLC on Thursday, paving the way for the country to speed up its slow-moving vaccination campaign. +VE
Tokyo must boost its military at a "radically different pace" than in the past to counter Beijing's growing capacity, Japan's defense minister said in an interview published Thursday. Nobuo Kishi warned the gap between Japan and China's military was "growing by the year," in an interview with the Nikkei newspaper.
the company and the government spokesman said Thursday.
SoftBank Group Corp (9984.T) CEO Masayoshi Son's stake in the Japanese conglomerate he founded has risen to 29.01% from 26.90% in February following the retirement of treasury shares, regulatory filings showed on Thursday.
NEC plans to export this fiscal year 5G cell phone base stations based on the Open RAN (radio access networks) system that it has been working on with other firms, the company’s president said Wednesday. The technology combines multiple manufacturers’ superior components, such as radios and control devices, in a bid to compete with leading rivals in Europe and China.
The Japanese government has issued warnings to Sumitomo Heavy Industries Ltd and a subcontracted firm after the latter leaked blueprints for parts of a military-use prototype machine gun to a Chinese company, the company and the government spokesman said Thursday. -VE
Expect markets to open higher following the US rebound; PPI higher than F/cast will fuel inflation worries and may limit the upside.
PPI Apr +5.6% YoY vs +4.1% Mar revised (F/cast was +5.1%)
PPI Apr +0.6% MoM vs +1.1% Mar revised (F/cast was +0.4%)
KDCA reported 646 new covid cases above 600 for a second day -VE
President Moon has been hoping to use his first summit with U.S. President Biden this week to press a legacy policy of engaging North Korea, but Washington has played down the prospect of any quick impetus on the issue. Slight -VE
Household income edged up in the first quarter from a year earlier, data showed Thursday, but the gain was mostly attributable to the government's emergency handouts aimed at tackling economic fallout of the new coronavirus pandemic. Slight +VE
Hyundai Steel is going pressing ahead with its hydrogen business. The steelmaker said Thursday that it will expand its hydrogen business to go in tandem with its biggest client Hyundai Motor Group’s fuel cell electric vehicle production. Hyundai Motor Group, in its Fuel Cell Electric Vehicle Vision 2030 unveiled in 2018, said it would produce 500,000 FCEV units by 2030. +VE
Beam Mobility can now be found on the roads at four new locations in South Korea, as the firm announced expansion of its service area. According to the Singapore-based micromobility startup, Beam Saturn+, a state-of-the-art model equipped with a cellphone dock and a cup holder will be rolled out at the four new locations -- Seoul’s Nowon District, Seongnam’s Bundang District, Goyang City and Gwangju City. +VE
Hyundai Investments on Thursday announced the closure of a new, 490 billion-won ($433 million) private fund dedicated to South Korea-focused acquisition financing for private equity clients. The fresh fund, closed on Tuesday, is a second installment of its kind to invest in senior debt, following a 230 billion-won fund created in February 2020. The first installment was fully invested a year after the fund close, financing private equity acquisitions of clients such as Macquarie, KKR and Hahn & Co.
Finance Minister Hong Nam-ki said Thursday that the government will roll out changes to housing policies which may include real estate taxation reforms as early as next month. -VE Property.
Expect market to open higher on strong export data for both tech and traditional exports and boosted by the rebound in US markets overnight
No data due but after market Thursday
Current Account Q1 $25.96b vs 27.33b Q4 (F/cast was 18.2b)
Export Orders Apr +42.6% YoY vs 33.3% Mar (F/cast was 32%)
The continued demand for tech gadgets, combined with the traditional sector roaring back, contributed to the exceptional growth, Department of Statistics Director Huang Yu-ling said. +VE
CECC reported 295 new cases of covid Thursday of which 286 were classified as domestic infections, as well as one death from the disease.
The Financial Supervisory Commission (FSC) yesterday told publicly traded companies to postpone their annual shareholders’ meetings from Monday next week to the end of next month to curb public gatherings amid a surge in COVID-19 infections.
Prospective home buyers might have to come up with bigger down payments as local banks become increasingly conservative in issuing housing loans with the central bank warning against lax lending practices, a report by My Housing Monthly said yesterday. -VE Developers
Expect market to open higher but upside limited by concerns over international relations as the EU halts ratification of trade deal with China
No data due
China reported 12 new mainland coronavirus disease infections on May 19, down from 14 a day earlier, Reuters reports.
The National Health Commission said in a statement one of the new patients was a local infection in northeastern Liaoning province. The others were imported infections originating from overseas.
The number of new non symptomatic patients, which China does not classify as confirmed, grew to 16 from 13 a day earlier.
The European Parliament halted on Thursday ratification of a new investment pact with China until Beijing lifts sanctions on EU politicians, deepening a dispute in Sino-European relations and denying EU companies greater access to China. -VE
An offshore arm of Chinese bad debt giant China Huarong Asset Management repaid a maturing dollar bond on time on Thursday, after concerns over its ability to service debts prompted a sell-off of its bonds last month, Reuters reports. The repayment of principal and interest on a maturing US$300 million 3.3 percent bond by China Huarong International Holdings, announced on its parent's official WeChat account, had been widely expected.
But doubts about the parent firm's financial situation and its ongoing restructuring plans continue to nag investors, who are concerned about potential losses and what they would mean for assumptions of government backing of major Chinese state-owned enterprises. Slight -VE
China said on Thursday an American warship had illegally entered its territorial waters in the South China Sea and was expelled, which the United States denied in the latest salvoes over Beijing's claims in the busy waterway. In a statement, the Chinese military's Southern Theatre Command said the USS Curtis Wilbur entered the waters near the Paracel islands without permission, adding that its ships and planes followed the U.S. vessel out. However, the U.S. Navy's 7th Fleet said the vessel "asserted navigational rights and freedoms" near the Paracel islands, over which China, Taiwan and Vietnam all claim sovereignty. The Chinese military's comments were false, it added.
Kiribati’s China-backed airstrip upgrade fuels political divisions in Pacific nation. The Pacific Island’s government and Beijing say the proposed revamp of the airstrip is to upgrade transport links. But opposition figures are questioning the purpose of the project, which will draw attention from the US and Australia. The leader of the main opposition party Boutokaan Kiribati Moa said “We know that China’s intention is not purely to help developing countries like ours but to help us in a way that in the end will help them with their interests,” she said. “It’s a civilian project but we are worried about the main intention of China,” she said. She worries Beijing may have military uses in mind for the facilities down the track or seek to exploit the country’s rich fishing stocks. “Why would China want to help us in this?”
ADR’s +9pts pts 28459 Tencent ADR closed lower despite earnings beating f/casts; reflecting the concern over more regulation.
Data due after market Inflation rate .
Out after market Thursday
HK Unemployment Apr 6.4% vs 6.8% Mar (F/cast was +6.6%)
Short Selling Thursday 18.9% vs 15.5% Tuesday
Top Shorts Country Garden (2007) 53%, Bud Apac(1876) 43%, ICBC (1398) 42%, NWD(17) 39%, Citic (267) 38%, Bank Comm (3328) 37%, Hengan (1044) 36%, Shenzhou Int (2313) 35%, Henderson Land (12) 35%, HSBC (5) 33%, China Life (2628) 31%, HK & China Gas (3) 31%, AIA (1299) 30%, Hang Seng Bank (11) 29%, Haidlao (862) 29%, CLP (2) 28%, MTRC (66) 25%
Henderson Land Development (0012) has received 3,070 checks for The Henley I in Kai Tak and will launch the second round of sales next week. The cheapest flat, measuring 208 sq ft, is offered at HK$5.73 million, or HK$27,554 per sq ft after discounts.
JD LOGISTICS (02618.HK), spun off from JD-SW (09618.HK) had its IPO registered approximately $216.3 billion margin as at around 6:00 pm according to brokers. Based on the public fundraising amount of about $792 million, the IPO was over-subscribed by almost 272 times.
CHINA MOBILE (00941.HK) announced that in April, 5G Package Customers reached 205 million, with a monthly net addition of 16.538 million, accelerated from March's 15.593 million.
The Urban Renewal Authority (URA) received a total of 14 tenders for the Oak Street / Ivy Street Development Project in Tai Kok Tsui when the invitation for submission of tender closed today (20 May 2021). The bidders include Sino Land (0083), Chinachem Group, Far East Consortium International (0035), Chevalier International (0025), Chevalier International (0025), Chuang's China Investments (0298), and ITC Properties (0199).
The project is valued at between HK$540 million and HK$810 million, or between HK$9,000 per buildable sq ft and HK$13,500 per buildable sq ft.
SHK PPT (00016.HK) disclosed a preliminary plan to issue more than $14-million vouchers under a reward program slated for the summer vacation. The cash coupon program will be available at 22 shopping arcades of the group.
TENCENT (00700.HK) announced that for the three months ended 31 March 2021, the net profit gained 65.3% yearly to RMB47.767 billion, beating the brokers' forecast of RMB25.763- 37.221 billion
The non-IFRS net profit added 22% yearly to RMB33.118 billion, in line with the brokers' forecast of RMB29.627-36.951 billion as compiled by our reporters. EPS was RMB3.481.
The EBITDA climbed 17% yearly to RMB49.4 billion. The adjusted EBITDA was RMB52.9 billion, up 17%. Looking forward, investment in many fields will be amplified by the company, including in enterprise services and software, and high-level industrialized games and short videos, since technological innovation and digital solutions are becoming increasingly popular among users and enterprises, and opportunities continue to appear in various vertical fields of operation.
AGM today, President Martin Lau accentuated that the group accords high value to oversight and regulation and that compliance has since the establishment been fundamental to them. The wave of scrutiny in China, although triggered by the behavior by one particular company, is natural development for every industry, opined Lau, and the group will view the process positively. He highlighted the company's strong focus on short video sector. Looking ahead, the tech giant will empower content creators with tools or monetization system so as to foster the contents for video accounts.
Meanwhile, the company also hopes to integrate the long and short videos by merging the company's investment and market leading position of long videos with the content production of short videos, diversifying contents for users and enriching the ecology. Although China's internet industry has seen behemoths fighting for throne, Lau emphasized that the focus should be on learning one another instead of competing.
Cathay Pacific sent a letter to all employees, saying vaccination will become a requirement for hiring workers in the future. The letter also mentioned that the airline may not be able to arrange flights for workers who have not received their shots. Earlier the airline said around 80 percent of pilots and 40 percent of flight attendants in Hong Kong have booked their vaccination or received their shots already.
The Securities and Futures Commission (SFC), in collaboration with the Stock Exchange of Hong Kong Limited (SEHK), is intensifying its efforts to tackle misconduct and improper behaviour related to new listings. An SFC-SEHK joint statement released today notes some problematic issues in recent initial public offerings (IPOs) which suggest the lack of genuine investor interest and call into doubt the existence of an open, orderly and fair market in the shares. Listing applicants and firms involved in the IPO.
The Stock Exchange today published conclusions to its consultations on the Main Board Profit Requirement and review of Listing Rules relating to disciplinary powers and sanctions. Conclusions focus on market quality and on investor protection. Profit Requirement will increase 60 per cent, with effect from 1 January 2022. Proposals relating to disciplinary powers and sanctions will be implemented with effect from 3 July 2021.
Each consultation received around 100 non-duplicated responses from a broad range of respondents representing stakeholders across the Hong Kong capital market.